- In today’s CEO Daily: Fortune energy editor Jordan Blum dissects the “Donroe” doctrine.
- The big story: Allies struggle to respond to Trump’s aggression.
- The markets: Edging lower globally.
- Plus: All the news and watercooler chat from Fortune.
Good morning. In the whirlwind since the U.S. attacked Venezuela and shockingly arrested or “kidnapped” (“It’s not a bad term,” the president said) leader Nicolás Maduro, Donald Trump emphasized the need to control Venezuela’s oil—and then threatened action against Colombia, Cuba, Mexico, and Greenland. The U.S. State Department posted, “This is our hemisphere.” And Trump aide Stephen Miller said the U.S. could next seize Greenland, arguing we live in a “real world” governed by strength, force, and power.
Here’s what leaders need to know about the “Trump Corollary” to the Monroe Doctrine—which Trump renamed the “Donroe” doctrine—to dominate the Western Hemisphere and exert influence over its oil, gas, and critical minerals for national security purposes.
Welcome to the age of ‘petro diplomacy’
Venezuela was clearly a warning shot to the hemisphere and the world, says Dan Pickering, founder of the Pickering Energy Partners consulting and research firm. Why now? The U.S. leads the world in oil and natural gas production, but its industries are maturing, meanwhile the U.S. needs help with critical minerals supply chains dominated by China. “Anything to keep more production close and friendly, I think we want to do,” Pickering told Fortune. That said, “Any next military step [beyond Venezuela] seems a lot harder to justify.”
Some fear Trump’s gambit could embolden our enemies
“These are neocon fantasies. People don’t like their governments, but they really don’t like the U.S. coming in and dictating to them,” observes David Goldwyn, Atlantic Council fellow and State Department special envoy for international energy in the Obama administration. Military action against Venezuela doesn’t deter China and Russia, it emboldens and incentivizes them to act against Taiwan and Ukraine, respectively, he said.
It will be years before U.S. companies see a profit in Venezuela
Although Venezuela is home to the world’s largest oil reserves, its dilapidated industry produces less than 1% of the world’s oil. Trump can say the U.S. oil companies are going back into Venezuela, but doing so is risky and requires tens of billions of dollars of expenses over several years before it could become profitable.—Jordan Blum Contact CEO Daily via Diane Brady at [email protected]
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